With the recent rash of bad weather, including Hurricanes, tornados and even earthquakes, what is our liability to pay employees when we had to close our offices?
Weather related business closure: We closed our offices recently due to the hurricane. Do we have to pay our employees for the day we told them not to report?
Under federal law an employer cannot penalize exempt employees for employer-mandated closures of less than one week. Exempt employees must be paid for any days missed when the employer closes for less than a week due to inclement weather.
When an exempt employee is ready, willing and able to work and the employer does not make work available, the employer must compensate the employee.
This means that if the employer closed its office for just one day, exempt employees must be paid for it. If the closure is for a full week, however, and exempt employees perform no work, the employer has no duty to pay them for that week barring a contract that otherwise requires compensation in this situation.
Non-exempt employees, are a different matter. If there isn’t a contract in place that defines the situation to the contrary then non-exempt employees may not have to be paid. Typically, non-exempt employees are only paid for time actually worked, so if they didn’t work, they don’t receive pay.
As the employer, you can require all employees to use accrued paid time off benefits during a business-mandated closure if it is consistent with company policy and past practice. This approach is not recommended because it can result in negative employee relations issues, particularly for employees who may have wanted to use their accrued paid time off benefits at another time.
Many employers elect to give employees the option to use paid time off benefits during a business-mandated closure.
You can read more in depth information in this US Department of Labor Opinion Letter on the subject.
For more information please contact www.hrknowledge.com or call us at 508-339-1300, Jeff Garr.Button Text.